On April 1, 2019, the Keller Administration will be submitting its second city budget for review and approval by the City Council after conducting budget hearings.
The Keller Administration is already working on the proposed budget.
According to one official, the work also includes a “wish list” of appropriations.
The 2019-2020 fiscal year begins on July 1, 2019.
By law, the city council must enact a balance budget each year and deficit spending is illegal.
According to a City Hall economic forecast, Albuquerque City Hall could face a $20 million deficit next year.
A city economist anticipates that the causes of the deficit will be higher spending on employee medical benefits, salaries and Police Department staffing and new costs associated with operating projects like the Albuquerque Rapid Transit (ART) project.
The Keller Administration Office of Budget and Management projects $622.7 million in general fund spending for fiscal year 2019 – 2020, up by $31 million from last year, or 5.2% increase in spending.
City hall is claiming there will be at least a $20 million shortfall in 2020 because of the following reasons:
1. $6.3 million is needed in capital implementation projects coming online over the course of the year
2. $1.2 million is needed for streetlight maintenance and signage
3. $1.2 million is needed for the ART bus line, even though the city is waiting for buses
4. $900,000 is needed for new expanded roadways
5. $442,220 is needed for the International District Library
6. $6.9 million is needed for employee medical benefits
7. $4 million is needed to fund a 2% raise for city workers
8. $4.7 million is needed to boost the Albuquerque Police Department’s officer ranks
TOTAL: $24.74 Million
City Chief Financial Officer Sanjay Bhakta said in an Albuquerque Journal interview he was not overly concerned about the projected shortfall partly because the spending built into the forecast is more of what he called a “wish list” than reality.
Bhakta when asked if the administration was considering another gross receipt tax increase this year, his response was: “That’s a big no.”
COMMENTARY AND ANALYSIS
This is the very type of story that weaken Mayor Tim Keller’s and the City Council’s credibility.
This is the very type of story that make voters become hostile towards government officials not making sure government is working within its means.
Budgeting $1.2 million for the ART bus line is laughable at best when by the Administration’s own admission no buses will be delivered for at least over a full 18 months with an empty bus route and unused bus stations.
Saying $4.7 million is needed to boost the Albuquerque Police Department’s officer ranks is just as laughable when the city has funded 1,040 cops but is projected to only employ 980 by July, so where has the unspent money gone for the 60 shortfall of cops not hired?
Asking for $6.3 million in capital implementation projects makes no mention when the projects will actually be completed and online and it is likely most of those projects are at the Rio Grande Zoo where the source of that funding should be the $250 million in revenues generated by the “Bio Park” gross receipts tax enacted by voters in 2015.
Last year at this time, it was reported that the city projected a $40 million shortfall for 2019.
Among the contributing factors last year to the deficit was the Albuquerque Police Department exceeding its overtime budget by $4 million by going from $9 million to $13 million and the excessive judgements paid out in APD deadly use of force cases such as the $5 million settlement paid in the Mary Hawkes case.
The city economist saying that the causes of the $20 million deficit will be higher spending on employee medical benefits, salaries and Police Department staffing and new costs associated with operating projects are the identical causes used last year as the causes of a $40 million deficit to justify raising the gross receipts tax last year.
In response to the projected deficit, the City Council approved raising the gross receipts tax by three-eighths of a percentage point.
The gross receipts tax increase bolstered the city’s income by an estimated $50.3 million this year and $57.3 million in 2020.
Keller signed the tax increase going against his 2018 campaign promise he made just months earlier to get elected of putting any tax increase on the ballot for voter approval.
Mayor Keller and the City Council need to articulate in clear and in no uncertain terms that there is no need for any further gross receipts tax increases.
Both Mayor Keller and the City Council need to insure that a balance budget will be adopted even if budget cuts have to be implemented and their “wish lists” are set aside.
City budgets need to based on the hard reality of income, not wishful thinking.